FAMR, Budget and everything in-between: the week in news

FAMR, Budget and everything in-between: the week in news

The news was dominated by two things this week: the Budget and the Financial Advice Market Review.

Of course, other things happened as well, so here’s a round-up of everything you need to know from the last five days:

1. Consultation creates consultations

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The biggest thing since the Retail Distribution Review dropped early Monday morning, with 80-odd pages on how to financial advice gap.

The Financial Advice Market Review’s final report laid out 28 recommendations, however 21 of which were suggestions of further consultations, working groups or working parties, many of which have speculative deadlines stretching out over several years.

Of course, the calls for further review did give an indication of where things are going, with the aim to define advice along Mifid lines and based upon a personal recommendation, along with the FCA being urged to create a dedicated robo-advice team and a suggestion that pensions could be raided to pay for advice.

Disappointingly for many, it was more decisive on the long-running issue of a liability long-stop for advisers, ruling this out once and for all. On the upside, the review backed reform of the way the FSCS is funded and stated that “more that can be done to help improve the transparency of the Financial Ombudsman Service’s process and outcomes”.

The regulator’s acting chief executive Tracey McDermott responded to the overwhelmingly negative industry reaction to the report’s conclusions by calling on advisers not to view proposals in isolation, but as a comprehensive package of measures designed to succeed where other FCA initiatives have failed.

2. Spoonful of sugar tax makes the cuts go down

At Wednesday lunchtime, the chancellor delivered his Budget speech, full of rhetoric about putting the next generation first.

Quite apart from the fact he hammered kids with longer school hours and less sugary drinks, one of the flagship policies was the introduction of yet another Isa - this time with the government giving those under the age of 40 a 25 per cent bonus on up to £4,000 that can be saved each year.

Industry reaction was mixed, with many pointing out the 5 per cent exit fee for people wanting to withdraw funds before the age of 60 and not spend this on a property.

While the mortgage market got off relatively lightly this time, there were complaints that previously-announced buy-to-let stamp duty hikes would apply to “significant investors” and those selling property would not benefit from George Osborne’s slashing of Capital Gains Tax.

There was some jubilation amongst advisers at the news that the much-maligned Money Advice Service is set to be merged - along with The Pensions Advisory Service and Pension Wise - into a streamlined financial guidance superbody, subject to consultation.

3. IFA directories take some flack

Elsewhere over the last few days, other things did still happen. One of these things was some criticism for a couple of competing consumer/adviser directory websites.